Jawbone’s Latest $300M Funding Was Debt, Not Equity: Bloomberg

Jawbone’s been having some problems both with product and with press lately, and those difficulties appear to be extending to corporate finance. Bloomberg reports that the company raised $300 million late last month from the private equity firm Blackrock, but that the round was debt, not equity.

It makes a difference. The loan is secured by Jawbone’s assets: intellectual property, royalties, receivables, and so forth. If the company runs into trouble, lenders — not investors — get first crack at the carcass. So if Jawbone hits the skids, it’ll be Blackrock — not equity investors Sequoia, Khosla, Kleiner Perkins, or Andreessen Horowitz — that will get paid first.

The $300 million is a significant portion of the $518 million that Jawbone has raised in its long history, according to Crunchbase. Interestingly, this is not the first round of debt that Jawbone has taken on: it borrowed $93 million in 2013.

As debt goes, Blackrock is a pretty solid lender. But Blackrock doesn’t play. It would behoove Jawbone to find a business and product plan and execute on it — something it’s had trouble with throughout its history.

Related

Subscribe To Our Weekly Newsletter

Subscribe now to the Wearable Tech Insider's weekly news blast. You'll get links to the top half-dozen stories in the world of wearable tech, optimized for quick reading. It's the best way to read the Wearable Tech Insider; it's free and you can change your mind any time. And, of course, we'll never sell your name or e-mail address...

Sign up for Wearable Tech Insider

Subscribe now to the Wearable Tech Insider's weekly news blast. You'll get links to the top half-dozen stories in the world of wearable tech, optimized for quick reading. It's the best way to read the Wearable Tech Insider; it's free and you can change your mind any time. And, of course, we'll never sell your name or e-mail address...